Lockbox Underpaid Receipt Processing

You can set up lockbox processing to automatically close transactions and create adjustment entries for underpaid receipts against customer invoices.

This helps reduce the need for post-processing activities to manually apply receipts and create adjustments.

The lockbox underpaid receipt processing setup uses a combination of:

• Designated AutoCash tolerance limit.
• Match payment with invoice AutoCash rule.
• Receipt Application Exception Rule for underpayments.

During lockbox processing, the underpaid receipt process:

1. First looks for a match between an invoice amount and the sum of the underpaid receipt amount and the AutoCash tolerance limit amount.
2. If these amounts match, lockbox applies the sum of the receipt amount and tolerance limit to the invoice with the lowest amount.
3. If two or more invoices have the same amount, lockbox applies the receipt to the invoice with the oldest due date.

Underpaid receipt processing for lockbox applies to:

• One business unit.
• One customer site within the business unit.
• One currency of the customer site.
• Customer transactions assigned a transaction type enabled for Natural Application Only, where adjustments bring the balance due to zero.

To set up lockbox underpaid receipt processing, complete these steps:

1. Create an AutoCash Rule Set enabled for application tolerance.
2. Create a Receipt Application Exception Rule for underpayments.
3. Update Receivables System Options for the applicable business unit.
4. Update the applicable customer site profile with the currency tolerance amount and adjustment reason.

Create AutoCash Rule Set

To create an AutoCash Rule Set for underpaid receipt processing:

1. Navigate to the Manage AutoCash Rule Sets page.
2. Click the Plus (+) icon to open the Create AutoCash Rule Set page.
3. In the Name field, enter the name for this AutoCash rule set.
4. In the Description field, enter an optional description.
5. In the Set field, select the reference data set you want.
6. In the Discount field of the Open Balance Calculations section, select None.

   This exposes the Include application tolerance amount option.

7. Enable the Include application tolerance amount option.
8. In the Rule Remaining Remittance Amount field of the Automatic Matching Rule section, select Unapplied.
9. In the Rules section, click the Plus (+) icon to open a new row.
10. In the Sequence field, enter 10.
11. In the Rule field, select Match payment with invoice.
12. Save your work.

Create Receipt Application Exception Rule

To create a Receipt Application Exception Rule for underpaid receipt processing:

1. Navigate to the Manage Receipt Application Exception Rules page.
2. Click the Plus (+) icon to open the Create Receipt Application Exception Rules page.
3. In the Set field, select the same reference data set you selected for the AutoCash rule set.
4. In the Name field, enter the name for this Receipt Application Exception rule.
5. In the Description field, enter an optional description.
6. In the Exception Rules section, click the Plus (+) icon to open a new row.
7. In the Condition field, select Underpayment less than.
8. In the Amount field, enter 100.
9. In the Percentage field, enter 100.
10. In the Action field, select Adjustment.
11. Save your work.

Update Receivables System Options

To update Receivables System Options for underpaid receipt processing:

1. Navigate to the Manage Receivables System Options page.
2. Search for and select the business unit you want to open the Edit System Options page.
3. Navigate to the Billing and Revenue tab.
4. In the Exception Rule Adjustment Activity field, select the Adjustments Receivables activity.
5. In the Exception Rule Adjustment Reason field, select Charges.
6. Navigate to the Cash Processing tab.
7. In the AutoCash Rule Set field, select the AutoCash rule set you created for automatic adjustments.
8. In the Application Exception Rule Set field, select the receipt application exception rule you created for underpayments.
9. In the AutoCash Tolerance Amount field, enter 100 (the same amount you entered in the Amount field of the Receipt Application Exception rule).
10. Save your work.

Update the Customer Site Profile

To update a customer site profile for underpaid receipt processing:

1. Navigate to the Manage Customers page.
2. Search for and select the customer you want.
3. Open the customer site you want in the Edit Site page.
4. Click the Profile History tab.
5. In the Site Profile tab of the Edit Site Profile page, navigate to the Receipt Matching section.
6. In the AutoCash Rule Set field, select the AutoCash rule you created and entered in Receivables System Options.
7. In the Application Exception Rule Set field, select the receipt application exception rule you created and entered in Receivables System Options.
8. Navigate to the Invoicing section.
9. In the Exception Rule Adjustment Reason field, select Charges.
10. Click the Credit Limits and Late Charge tab.
11. Navigate to the Currency Settings section.
12. In the Currency row you want, enter 100 in the AutoCash Tolerance Amount field.
13. Save your work.